Banks are utilized most as places of security for the deposit of money. The business of banking arose from a desire on the part of merchants to obtain a place where they might with safety lodge their funds. It is common knowledge that anyone who has had the care of large sums of money, knows that it is not without great anxiety attendant upon their custody. A person in this case must either take care of his money himself or entrust it to a servant. The better way would be to entrust it to others whose honesty and ability are well known, and who are engaged especially in that class of business. The evils accompanying the keeping of one's money under one's own roof are many, which by means of banking are practically eliminated.

Banks invariably allow interest for sums of money placed in their hands as deposits. In this way, large sums of money, which otherwise remain unproductive in the hands of individuals or hoarded away, are collected into large amounts in the hands of the bankers who employ them in granting facilities to trade and commerce. Thus, banking increases the productive capital of the nation.

Of great advantage are the facilities afforded by bankers to the benefit of society, in the making of advances by the former to persons who want to borrow money. This is effected either by the discounting of bills upon personal security, or upon the joint security of the borrower, with sureties as an additional protection to the bank, and, also, upon deeds and mortgages on real estate, or real and personal property. It is thus that persons engaged in trade and commerce are enabled to augment their capital, and consequently their wealth. Production, moreover, is stimulated by the increase of money circulation which otherwise is kept away from the channels where it would best benefit trading.

Bankers transmit money from one part of the country to another, and from one country to another country. The necessity for transferring money arises very frequently on the part of merchants and traders. This can be most conveniently done by paying the money to a bank, which, in turn, arranges with a correspondent bank in or near the distant town to pay the designated party the amount specified. The risk of transferring actual money is therefore eliminated, and by means of periodical settlements between the two banks, such transfers are made comparatively inexpensive.

"Till money" is that denomination of currency which is best adapted for carrying on commercial operations in a particular place. Whenever a bank is established, the public is enabled to obtain that denomination of currency or "till money" which they need most in their business. In a town which has no bank, a person may have occasion to use small notes and have none but large ones, and at other times he may have need of large notes and not be able to obtain them. The banks have at all times a supply of notes of all denominations which depositors may require, and are always ready to exchange them for others of a different denomination. Banks, too, have a supply of silver at all times, and if it is necessary that the community be furnished with more silver, banks will obtain it. Contra, banks will receive specie in the form of a deposit or exchange for their notes should it be too abundant in any locality. This is of great convenience to the community as it eliminates the necessity of people keeping on hand too large a sum of money to meet their needs.

Of great advantage to a bank's customers is that service rendered by a bank by means of which one is able to save time and trouble otherwise necessary in the handling of actual money. Consider how much longer it will take to count up a large sum of money than it does to write out a check or a draft, and how much less trouble it is to receive a check or a draft to pay the bank, than it is to pay the sum of money in currency. The development of the check and the draft with its many available uses affords a great advantage and convenience to depositors of banks and the public in general.

Banks render a very valuable service in making collections for their customers. A merchant or tradesman who keeps a banker saves the trouble and expense of presenting promissory notes which he holds, or drafts which he may draw against a customer. He may turn these over to his banker for safekeeping and collection at maturity. He thus saves trouble and inconvenience on his part, since the custody of his bills, the anxiety about their being stolen, the danger of forgetting them until they are overdue, thus exonerating the indorsers, as well as the trouble of sending such bills to a distant town in order to demand payment is shifted to the banker instead of remaining with the holder of the draft. The presenter of the draft has nothing more to do than to see the amount entered to his credit in his banker's books. If a bill be not paid, it is brought back to him on the day after it falls due, properly noted. Bankers will bear evidence to the fact that the bill was duly presented, and will furnish a notary to attest that the bill did not meet with honor upon presentation, assigning at the same time a reason why the draft was not paid.

Numerous other advantages are afforded by banks to the public generally, which are just as important as the services outlined above.

Another advantage of keeping a banker is that by this means one has a continual reference as to one's respectability. If a mercantile house in a distant part of the country writes to its agent to ascertain the respectability of a firm in another part of the country, the first inquiry is: "What are the banking references?" When this information is ascertained, the banker is applied to, through the proper channels, and he gives his testimony as to the respectability of his customer. When a trader gives his bill, it circulates through the hands of many individuals to whom he is personally unknown, but if the bill is made payable at a banking house, it bears on its face a reference to a party to whom the acceptor is known and who must have some knowledge of his character as a tradesman. This is of immense advantage to a man in business as it increases his credit standing.

By means of banking, people are able to preserve an authentic record of their actual expenditures. Assume that a person pays in to his banker all the money he receives in the course of a year and makes all his payments by checks. By proper entries as to the purpose for which his check has been drawn, as well as by corresponding entries of all receipts deposited, he may readily ascertain the total amount of his receipts and the various items of his expenditures. A bank account is useful also in case of dispute in payments. A check or draft upon a bank is the best form of receipt for money paid. A payment in actual money, that is, in the form of bills, specie, or other currency, does not furnish evidence of a payment in fact, while on the other hand, settlement by check or draft upon a bank furnishes a receipt at the same time as it effects a settlement.

By keeping a banker, people have a ready channel of obtaining much information that will be useful to them in their business. They will know the way in which bankers keep their accounts. They will learn many of the laws and customs relating to bills of exchange and banking. By inquiring of the banker, many valuable advices may be received from him. The banks furnish information as to the reliability of respectable parties with whom they would recommend dealings. They are also appointed executors and administrators of estates, act as guardians, engage in financing by means of bond issues, and perform various other functions.

Banking also exercises a powerful influence upon the morals of society. It tends to produce honesty and punctuality in pecuniary engagements. Bankers in their own interest always have a rigid regard to the moral character of the party with whom they deal. They inquire whether he be honest or tricky, industrious or idle, prudent or speculative, thrifty or prodigal, and they will more readily make advances to a man of moderate property and good morals than to a man of much property but inferior reputation. Therefore, it may be said that the establishment of a bank in any locality advances the pecuniary value of good moral character.